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1/30/2018

FG SPENDS N5TR ON FUEL SUBSIDY PAYMENT

THE Nigerian National Petroleum
Corporation (NNPC) has told the Senate Committee on Petroleum Resources

(Downstream) investigating subsidy payment that the Federal Government spent
N4.950.80 trillion in the exercise.

This is coming at a time
President of the Senate, Bukola Saraki, has declared that NNPC stinks, vowing
that those behind fraud in the corporation will be exposed.

Speaking at the hearing on subsidy payment, Group Managing Director
of the NNPC, Dr. Maikanti Baru, said
out of the N5.121.40 trillion approved subsidy, the Federal Government has
spent N4.950.80 trillion, with N170.6 billion outstanding arrears for January
2006-December 2015.

He said the figure was arrived at
after deduction of N4.950.80 trillion received as payments from the N5.121.40
trillion approved subsidy claims of the Corporation from January 2006 to
December 2015.

Giving details of the accruals,
Chief Financial Officer of the Corporation, Mr. Isiaka AbdulRazaq, traced the
advent of the subsidy regime to October 2003, when NNPC was directed by
government to commence the purchase of domestic crude oil at international
market price without a corresponding liberalisation of the regulated price of
petroleum products.

He explained that under the
subsidy regime, NNPC and other suppliers of refined petroleum products were
entitled to full subsidy claims to the Petroleum Products Pricing Regulatory
Agency (PPPRA).

AbdulRasaq, however, noted that
unlike other oil marketers, NNPC did not receive cash payment for subsidy
claims as its subsidy claims were deducted out of cost payment to the
Federation Account after due certification by PPPRA.

‘’In summary, NNPC submits that
the amount of over N5.1 Trillion was duly approved by PPPRA as subsidy claims
for NNPC. Out of this sum NNPC is still being owed N170.6 Billion,’’ the NNPC
CFO said.

The Corporation called on the
Senate Downstream Committee to assist in ensuring that the outstanding debt was
settled to enable it effectively achieve its obligation as the supplier of last
resort to the downstream sector.

Chairman of the Senate Committee,
Senator Kabiru Marafa, commended NNPC for the elaborate presentation while
pledging its support to all stakeholders in the sector to ensure uninterrupted
supply and distribution of petroleum products

Meanwhile, Saraki has revealed
that the NNPC has remained a cistern of deep rooted corruption, illegality and
abuse of financial procedures, despite frantic efforts to reform it.

Speaking at the commencement
of the public hearing , Saraki said huge
sum was spent on payment of fuel subsidy.

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